Can I Claim Against MVIL If the Vehicle Was Uninsured?

This is the part of the law that changed most in 2021, and the change is not yet widely understood. The answer now depends entirely on the date of the accident.

Accidents before 21 September 2021

As enacted in 1974, section 54(1) made the Trust the defendant not only for insured vehicles but also, under paragraph (b), for “an uninsured motor vehicle in a public street”. The insurer paid the victim and then, under section 57, recovered what it had paid from the owner and driver of the uninsured vehicle. The scheme thus operated as a nominal defendant fund, so that the victim of an unregistered vehicle was not left without a remedy.

The courts applied the paragraph generously to victims. In Waima v Motor Vehicles Insurance (PNG) Trust [1992] PGLawRp 598; [1992] PNGLR 254 the registration and insurance had expired; the court held that this “did not affect the status of the claim under s 54”, and the widow recovered. In Pyakalo v MVIT [1992] PGNC 32; N1092 the vehicle was unregistered, uninsured and overloaded but identified, and the Trust was liable. Two conditions had to be met. The vehicle had to be on a public street, as defined, and the claimant still had to prove negligence: the paragraph made the Trust answerable for the uninsured driver’s fault, not a guarantor of every injury.

The 2021 repeal

Section 2 of the Motor Vehicles (Third Party Insurance) (Amendment) Act 2021, certified on 21 September 2021, amended section 54(1) “by repealing Paragraphs (b) and (c)”. From that date the only claim directed to MVIL is one arising from “a motor vehicle insured under this Act”. The Act contains no transitional provision, so the ordinary rule applies: an accident before the commencement date gives rise to a claim under the law as it then stood, and section 61 of the Act preserves remedies against the person responsible in any event.

The reason for the repeal is not stated in the Act, and the sessional legislation on PacLII does not include the explanatory material. Whatever the reason, the effect for a victim injured by an uninsured vehicle after September 2021 is stark: there is no claim against MVIL. The remedy is an ordinary negligence action against the driver, and against the owner if the owner was at fault or is vicariously liable, with all the difficulties of finding them and recovering from them that the 1974 Act had been designed to avoid.

When is a vehicle “uninsured”?

Because so much now turns on it, the definition matters. An “uninsured motor vehicle” is one that is not an insured motor vehicle, but the definition excludes vehicles owned by the State or a government authority and vehicles exempted under the Act. A vehicle is insured if a third party cover exists “at all material times”, and under section 49(2)(c) the cover continues for 15 days after the registration expires, or until renewal if renewed within 15 days. A vehicle whose registration lapsed a week before the accident is insured; one that lapsed a month before is not, unless it belongs to the State.

Proof is on the claimant. Where MVIL disputes insurance, an accident report alone may not do; a search of the Motor Traffic Registry or evidence from the investigating officer of the registration and insurance details is needed. See how do I prove the vehicle was insured.

MVIL’s recovery rights

Section 57(1), which still stands, allows MVIL to recover as a debt any amount “properly paid” in satisfaction of a claim under the old paragraphs (b) or (c), with its costs, from the person who was the owner at the time, or from the owner and driver jointly or severally. Section 57(2) gives the owner a defence if someone was driving without his authority, and gives the driver of an uninsured vehicle a defence if he reasonably believed both that he had the owner’s authority and that the vehicle was insured. These provisions continue to operate for pre-2021 claims MVIL has paid or may yet pay.

The offence of using an uninsured vehicle

Under section 59, a person who uses, or causes or permits another person to use, an uninsured motor vehicle commits an offence punishable by a fine of up to K500 or imprisonment for up to 12 months, or both. It is a defence to prove a reasonable and genuine belief that the vehicle was insured. Section 61 makes clear that a prosecution does not affect the victim’s civil remedies. In practice the offence is prosecuted alongside traffic offences under the Road Traffic Act 2014.